SLIDE 8: your BLOC is an income management tool
Let's Summarize These Facts
First, You Must Have Discretionary Income for the BLOC program to work
if you are living from check-to-check, you will not benefit from this program. It is your excess monthly income that allows your BLOC to function like a bank.
Note: you can build discretionary income by using your BLOC to consolidate credit card and other related debts: this topic will be discussed later.
Do You Set Aside Extra Funds for Emergency or Other Family Needs?
Never let your income sit idle in your checking or money market accounts.
- all income and savings should be deposited into the BLOC account;
- all living expenses (including your mortgage payment) should be paid from the BLOC account.
Any excess income will be automatically applied to the BLOC balance, thus working instantly to reduce any related debt costs.
With the BLOC, Your Equity Line is Your Emergency Fund
The more discretionary income that you generate (by budgeting and savings), the faster the payoff. We have suggestions on building more discretionary income in another section.
You need to budget your spending to maximize benefits. Having an equity line can be tempting for purchases that are not needed, which can defeat the BLOC program. Budgeting helps you to say NO to unnecessary costs.
Use Your BLOC to Fund Life-Events
- home improvement
- college tuition
- new or used auto
- wedding expenses
- use the money as needed
- use credit cards to manage expenses
- note: we will discuss this process in more detail
Use Your BLOC to Payoff Your Debts
- all credit card debt
- all auto loan debt
- all existing home equity loan debt
- all personal loan debt
- note: after you pay off existing debt, you need to have a remaining credit line of $20,000 or more for the BLOC program to work. Make sure you open a sufficient line of credit that pays off your debts and leaves open a $20,000 credit line balance for the BLOC use: calculate how much your line should be based on your LTV position
Note: The money used to pay the monthly debt payments will now be added as discretionary income for the BLOC program.
Do Not Payoff:
mortgage loan debt:
we have a slide presentation how you can use your BLOC to payoff mortgage debt
we will demonstrate this laterstudent loan debt:
if you have federal student loan debt that has not been previously consolidated, you should consider consolidating that debt under the federal student loan program. It offers attractive consolidation featuresgo to the next slice
